Third Point Third Quarter 2012 Investor Letter

Against a backdrop of continued macroeconomic and political uncertainty we have great confidence in the individual positions we hold. Our portfolio is filled with compelling, attractively-valued, catalyst-oriented situations that are appropriately sized to our convictions. We protect against worrisome events by opportunistically buying protection inexpensively, maintaining a portfolio of short positions, and taking comfort that our credit portfolio likely will be less volatile and provide dependable cash flows. Keeping in mind the present climate of cross-currents of dovish global monetary policy propping up markets (and incumbent politicians’ popularity despite policies effectively transferring wealth from savers to speculators, something lost on most followers of the populist leaders promoting them), anemic growth in the US and Europe, a potential recession in China, and the fallout from the US election, we believe we have struck a decent balance in our portfolio to perform under a variety of scenarios and circumstances.